The Japanese yen is lower on Thursday, after climbing 2.4% over the past two trading sessions. In the European session, USD/JPY is trading at 151.83, up 0.57% on the day. On the data calendar, Japan releases Tokyo Core CPI. In the US, the financial markets are closed for the Thanksgiving holiday and there are no US events.
Tokyo Core CPI expected to rise to 2.1%
Tokyo Core CPI, a leading indicator of nationwide inflation trends, will be released on Friday. The market estimate for November stands at 2.1% y/y, following a 1.8% gain in October, which was the lowest level since April. The headline rate is expected to rise from 1.8% to 1.9%.
October inflation numbers have been mixed. The Bank of Japan Core CPI index surprised on the downside with a 1.5% gain, down from 1.7% in September. However, services inflation inched up to 2.9%, up from 2.8% in September and above the forecast of 2.5%. If the Tokyo inflation release accelerates as expected, it will likely raise expectations of a rate hike from the Bank of Japan at the Dec. 19 meeting.
Inflation isn’t the only item on the minds of BoJ policymakers. There is significant political uncertainty both at home and abroad. Prime Minister Ishiba lost his majority in parliament in the October election and needs opposition support to pass a supplementary budget. In the US, President-elect Trump is threatening to slap tariffs on its trading partners, which could have massive negative implications for Japan’s auto industry, a key sector of the economy.
On Wednesday, US GDP (second estimate) confirmed the initial estimate gain of 2.8% for the third quarter. This indicates solid economic growth, which has been helped by strong consumer spending. The worries about a recession have subsided and the Fed has signaled that it plans to gradually continue trimming interest rates.
USD/JPY technical
-
USD/JPY is testing resistance at 151.60. Above, there is resistance at 152.75.
-
149.97 and 148.82 are the next support levels.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0550 after soft German inflation data
EUR/USD trades in negative territory slightly below 1.0550 on Thursday. Soft inflation data from Germany makes it difficult for the Euro to gather strength, causing the pair to stretch lower. US markets will remain closed in observance of the Thanksgiving Day holiday.
GBP/USD trades below 1.2700 on modest USD recovery
GBP/USD stays under modest bearish pressure and fluctuates below 1.2700 on Thursday. The US Dollar corrects higher following Wednesday's sharp decline, not allowing the pair to gain traction. The market action is likely to remain subdued in the American session.
Gold clings to small daily gains near $2,650
Gold (XAU/USD) reverses an intraday dip to the $2,620 area and trades near $2,650 on Thursday, albeit it lacks bullish conviction. Investors remain concerned that US President-elect Donald Trump's tariff plans will impact the global economic outlook.
Fantom bulls eye yearly high as BTC rebounds
Fantom (FTM) continued its rally and rallied 8% until Thursday, trading above $1.09 after 43% gains in the previous week. Like FTM, most altcoins have continued the rally as Bitcoin (BTC) recovers from its recent pullback this week.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.